Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>POSCO has signed a strategic partnership with Cleveland-Cliffs. POSCO is likely to invest more than 1 trillion won to purchase at least a 10% stake in Cleveland-Cliffs by early 2026.</li>
<li>Local media have mentioned that POSCO is likely to invest more than 1 trillion won (US700 million) to purchase at least a 10% stake in Cleveland-Cliffs by 2026.</li>
<li>Overall, we believe that a potential US$700 million investment in Cleveland-Cliffs for about 10% stake in the company could have a positive impact on POSCO.</li>
</ul>


POSCO has signed a strategic partnership with Cleveland-Cliffs. POSCO is likely to invest more than 1 trillion won to purchase at least a 10% stake in Cleveland-Cliffs by early 2026.
Local media have mentioned that POSCO is likely to invest more than 1 trillion won (US700 million) to purchase at least a 10% stake in Cleveland-Cliffs by 2026.
Overall, we believe that a potential US$700 million investment in Cleveland-Cliffs for about 10% stake in the company could have a positive impact on POSCO.


POSCO: Signs a Strategic Partnership with Cleveland-Cliffs

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Cleveland-Cliffs recently reported its second-quarter financial results for 2025, showcasing a mixed set of outcomes that highlight both strategic progress and ongoing challenges.</li><li>The company achieved significant operational efficiency, increasing its adjusted EBITDA by $271 million compared to the previous quarter.</li><li>This improvement was driven by higher shipment volumes, enhanced production efficiency, and strategic cost-cutting initiatives.</li></ul>

Cleveland-Cliffs recently reported its second-quarter financial results for 2025, showcasing a mixed set of outcomes that highlight both strategic progress and ongoing challenges.The company achieved significant operational efficiency, increasing its adjusted EBITDA by $271 million compared to the previous quarter.This improvement was driven by higher shipment volumes, enhanced production efficiency, and strategic cost-cutting initiatives.

Cleveland-Cliffs: An Insight Into Its Vertical Integration Efforts & Domestic Independence!

Global Materials | Industrials | Commodities

Rahul Jain

<ul>
<li>Q2 EBITDA of $97M beat expectations by $132M, driven by record shipments, a $15/ton cost cut, and ASP of $1,015/ton.</li>
<li>Management reaffirmed a $50/ton cost-reduction target, expects H2 free cash flow inflection, and sees stable shipments with pricing support.</li>
<li>Despite a 12.5% post-earnings rally, CLF trades at just 0.55x P/B and $653/ton EV, a steep discount to U.S. peers like Nucor and SDI.</li>
</ul>


Q2 EBITDA of $97M beat expectations by $132M, driven by record shipments, a $15/ton cost cut, and ASP of $1,015/ton.
Management reaffirmed a $50/ton cost-reduction target, expects H2 free cash flow inflection, and sees stable shipments with pricing support.
Despite a 12.5% post-earnings rally, CLF trades at just 0.55x P/B and $653/ton EV, a steep discount to U.S. peers like Nucor and SDI.


Cleveland-Cliffs Q2 FY25: Strong Beat, H2 Upside Intact, Valuation Still Undemanding

<ul>
<li>EBITDA loss of $174M, net loss of $483M, driven by weak auto demand, high costs, and continuing drag from AMNS slab contract; EBITDA/ton fell sharply to –$42.</li>
<li>Idling six facilities, exiting loss-making operations, $300M cost savings targeted in H2; slab contract expiry to add ~$500M EBITDA annually from 2026.</li>
<li>Deep value: Trading at 4.4x EV/EBITDA (2026E), 7.1x P/E, 0.55x P/B, and $653 EV/ton of full steelmaking capacity, reflecting deep cyclical pessimism.</li>
</ul>


EBITDA loss of $174M, net loss of $483M, driven by weak auto demand, high costs, and continuing drag from AMNS slab contract; EBITDA/ton fell sharply to –$42.
Idling six facilities, exiting loss-making operations, $300M cost savings targeted in H2; slab contract expiry to add ~$500M EBITDA annually from 2026.
Deep value: Trading at 4.4x EV/EBITDA (2026E), 7.1x P/E, 0.55x P/B, and $653 EV/ton of full steelmaking capacity, reflecting deep cyclical pessimism.


Cleveland-Cliffs: Weak Q1 Results, Restructuring Underway, Valuations Reflect Deep Discount

<ul><li>Cleveland-Cliffs reported a challenging first quarter of 2025, grappling with lower-than-expected performance metrics, particularly in terms of EBITDA and cash flow.</li><li>The company attributed these underwhelming results predominantly to low steel prices lingering from late 2024 into early 2025 and the lagging performance of non-core assets.</li><li>The federal tariffs on foreign steel, imposed under Section 232, were highlighted as critical to mitigating unfair competition—a policy supported by the Trump administration that aims to bolster domestic production.</li></ul>

Cleveland-Cliffs reported a challenging first quarter of 2025, grappling with lower-than-expected performance metrics, particularly in terms of EBITDA and cash flow.The company attributed these underwhelming results predominantly to low steel prices lingering from late 2024 into early 2025 and the lagging performance of non-core assets.The federal tariffs on foreign steel, imposed under Section 232, were highlighted as critical to mitigating unfair competition—a policy supported by the Trump administration that aims to bolster domestic production.

Cleveland-Cliffs Abandons Weirton Plant—What’s Behind This Bold Pivot?

United States

Cleveland-Cliffs Inc. is an American iron ore mining company. The Company supplies iron ore pellets, lumps and fines to blast furnaces in the global steel industry. Cliffs is in the process of expanding its customer base to Electric Arc Furnaces.

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Cleveland-Cliffs Inc (CLF US)

POSCO: Signs a Strategic Partnership with Cleveland-Cliffs

POSCO has signed a strategic partnership with Cleveland-Cliffs. POSCO is likely to invest more than 1 trillion won to purchase at least a 10% stake...

Douglas Kim

Cleveland-Cliffs: An Insight Into Its Vertical Integration Efforts & Domestic Independence!

Cleveland-Cliffs recently reported its second-quarter financial results for 2025, showcasing a mixed set of outcomes that highlight both strategic...

Baptista Research

Cleveland-Cliffs Q2 FY25: Strong Beat, H2 Upside Intact, Valuation Still Undemanding

Cleveland-Cliffs beats expectations with strong Q2 EBITDA, plans for cost cuts and stable shipments, trading at a discount to peers.

Rahul Jain

Cleveland-Cliffs: Weak Q1 Results, Restructuring Underway, Valuations Reflect Deep Discount

Cleveland-Cliffs beat Q2 FY25 expectations with $97 mn of adjusted EBITDA (vs. an estimated loss), thanks to record 4.29 Mt steel shipments and...

Rahul Jain

Cleveland-Cliffs Abandons Weirton Plant—What’s Behind This Bold Pivot?

Cleveland-Cliffs reported a challenging first quarter of 2025, grappling with lower-than-expected performance metrics, particularly in terms of...

Baptista Research

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POSCO: Signs a Strategic Partnership with Cleveland-Cliffs

POSCO has signed a strategic partnership with Cleveland-Cliffs. POSCO is likely to invest more than 1 trillion won to purchase at least a 10% stake...

Douglas Kim

Cleveland-Cliffs: An Insight Into Its Vertical Integration Efforts & Domestic Independence!

Cleveland-Cliffs recently reported its second-quarter financial results for 2025, showcasing a mixed set of outcomes that highlight both strategic...

Baptista Research

Cleveland-Cliffs Q2 FY25: Strong Beat, H2 Upside Intact, Valuation Still Undemanding

​Cleveland-Cliffs beats expectations with strong Q2 EBITDA, plans for cost cuts and stable shipments, trading at a discount to peers.

Rahul Jain

Cleveland-Cliffs: Weak Q1 Results, Restructuring Underway, Valuations Reflect Deep Discount

Cleveland-Cliffs beat Q2 FY25 expectations with $97 mn of adjusted EBITDA (vs. an estimated loss), thanks to record 4.29 Mt steel shipments and...

Rahul Jain

Cleveland-Cliffs Abandons Weirton Plant—What’s Behind This Bold Pivot?

Cleveland-Cliffs reported a challenging first quarter of 2025, grappling with lower-than-expected performance metrics, particularly in terms of...

Baptista Research

Cleveland-Cliffs beats expectations with strong Q2 EBITDA, plans for cost cuts and stable shipments, trading at a discount to peers.